Farewell. The Flying Pig Has Left The Building.

Steve Hynd, August 16, 2012

After four years on the Typepad site, eight years total blogging, Newshoggers is closing it's doors today. We've been coasting the last year or so, with many of us moving on to bigger projects (Hey, Eric!) or simply running out of blogging enthusiasm, and it's time to give the old flying pig a rest.

We've done okay over those eight years, although never being quite PC enough to gain wider acceptance from the partisan "party right or wrong" crowds. We like to think we moved political conversations a little, on the ever-present wish to rush to war with Iran, on the need for a real Left that isn't licking corporatist Dem boots every cycle, on America's foreign misadventures in Afghanistan and Iraq. We like to think we made a small difference while writing under that flying pig banner. We did pretty good for a bunch with no ties to big-party apparatuses or think tanks.

Those eight years of blogging will still exist. Because we're ending this typepad account, we've been archiving the typepad blog here. And the original blogger archive is still here. There will still be new content from the old 'hoggers crew too. Ron writes for The Moderate Voice, I post at The Agonist and Eric Martin's lucid foreign policy thoughts can be read at Democracy Arsenal.

I'd like to thank all our regular commenters, readers and the other bloggers who regularly linked to our posts over the years to agree or disagree. You all made writing for 'hoggers an amazingly fun and stimulating experience.

Thank you very much.

Note: This is an archive copy of Newshoggers. Most of the pictures are gone but the words are all here. There may be some occasional new content, John may do some posts and Ron will cross post some of his contributions to The Moderate Voice so check back.

Tuesday, February 21, 2012

Time to put Greece out of its misery

By BJ Bjornson

I swear that watching the ongoing Greek debt debacle is like watching some guy with broken legs in a wheelchair getting "helped out" by a bunch of thugs who proceed to break his arms and then demand he get rid of the "luxury" wheelchair to pay for his medical treatment. Every so-called bailout package, thanks to their ever-more-onerous austerity measures that will crash a weak economy even further, seem designed to make the situation worse rather than better.

And as bad as this latest deal is, it is merely another stopgap measure, since the numbers simply don't add up.

The problem, of course, is that all the observers and "segregated accounts" in the world can't turn Greece's economy around when it's burdened with an overvalued currency and has no ability to implement any kind of stimulus. Quite the opposite: in order to get this deal done, Greece had to find yet another �325 million in "structural expenditure reductions", and promise a huge amount of front-loaded austerity to boot.

The effect of all this fiscal tightening? Magic growth! A huge amount of heavy lifting, in terms of making the numbers work, is done by the debt sustainability analysis, and specifically the assumptions it makes. Greece is five years into a gruesome recession with the worst effects of austerity yet to hit. But somehow the Eurozone expects that Greece will bounce back to zero real GDP growth in 2013, and positive real GDP growth from 2014 onwards. Here's the chart:

Note that the downside, here, still looks astonishingly optimistic: where's all this economic growth meant to be coming from, in a country suffering from massive wage deflation? And under this pretty upbeat downside scenario, Greece gets nowhere near the required 120% debt-to-GDP level by 2020: instead, it only gets to 159%. And to make things worse for the Eurozone, the report explicitly says that under the terms of this deal, "any new debt will be junior to all existing debt" - in other words, there's no way at all that Greece is going to be able to borrow on the private markets for the foreseeable future, so long as this plan is in place.

Magic growth is about right, given Greece is being forced to find 325 billion euros in savings with a GDP that is only 220 billion euros and falling. And yet look at that chart! The cripple, being forced to even further cripple himself, is expected to make a miraculous recovery almost immediately! The wishful thinking of this scenario is simply mind-boggling.

This is what happens when you replace empirical evidence and critical thought with ideology, stupidity parading as sense. Unfortunately for the Greeks, the real world consequences of such are going to be quite painful indeed.

1 comment:

Yeah, BJ, I watched part of the so-called press conference this morning on either RT or AlJazeera and all I could yell at the TV was why are you idiots smelling and why is any reporter in the room even taking you seriously. What a clown show, and given the general reporting on the matter I'll bet most average people think some how the troika is doing those lazy Greek grasshoppers a favour. Yanis Varoufakis has a nice dissection of the old Aesop fable as it relates to Greece here: http://j.mp/zdr4fw .Half way down the page is what I think a telling interview with Mr Robert Halver, Baader Bank's Chief economist. The guy obfuscates and seems to live in a world unpopulated with real human beings.